- AUD / USD witnessed some profit taking on the last trading day of the week.
- The decline remains cushioned near the 0.7715-10 confluence support.
- The setup favors bullish traders and supports the prospects for higher profits.
The pair AUD/USD it was down on the last trading day of the week and trimmed some of the positive move the day before to four-week highs. The pair was last seen trading just below 0.7750, down 0.15% on the day.
China’s mixed economic releases appeared to be the only factor sparking some profit-taking around the Australian proxy for China. That said, a softer tone around the USD extended some support to the AUD / USD pair. Apart from this, the prevailing climate of risk appetite further contributed to limiting the decline in the Australian dollar perceived as riskier.
Looking at the technical picture, AUD / USD stalled this week’s solid bounce from levels below 0.7600 just before resistance marked by the 50% Fibonacci level of the 0.8008-0.7531 drop. However, the pullback lacked a solid follow-up and the pair has, so far, managed to stay above the 50-day SMA / Fibonacci of 38.2%. confluence region.
The mentioned support is pegged near the 0.7715-10 region, which should now act as a key point for short-term traders and help determine the next leg of a directional move for the AUD / USD pair. Given that the oscillators on the daily chart have only just started to move into the positive territory, the bias appears tilted in favor of bullish traders.
However, it will still be prudent to wait for a sustained move beyond the 61.8% Fibonacci level, around the 0.7765-70 region before positioning for any further appreciation moves. The AUD / USD pair could then aim to break above the 0.7800 mark and test the 61.8% Fibonacci level, around the 0.7825-30 area, which is closely followed by the March highs near 0.7850.
On the other hand, weakness below the 0.7715-10 confluence-turned-support confluence should now be seen as a buying opportunity. This should help limit the decline near the recent breaking point of the trading range, around the 0.7665-60 region. Only a sustained break below the latter will negate the positive bias and trigger some technical selling.
Daily chart
Technical levels
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